BETAM's Contraction Forecast for the Fourth Quarter of 2025

BETAM: Economic Contraction Expected in Turkey in 2025

The Bahçeşehir University Center for Economic and Social Research (BETAM) has announced its GDP forecasts for the fourth quarter of 2025. The finalized data for October and the partially announced leading indicators for November indicate that the Turkish economy is expected to contract on an annual basis.

Stalled Economic Activity

According to the report titled “Economic Growth and Forecasts” compiled by Prof. Dr. Seyfettin Gürsel and Dr. Oğuz Yurtoğlu, a significant slowdown in economic activities in Turkey is anticipated in the last quarter of 2025. The report projects that Turkey’s economy will shrink by 0.6% in the fourth quarter of 2025 compared to the same period of the previous year.

Increase in Consumer Loans

The fourth quarter forecasts suggest an increase in consumer loans and public spending, while indicating a continued weakness in the industrial production, exports, and investment indicators. It is expected that consumer loans and credit card expenditures will rise by 10% compared to the same quarter last year, while public consumption expenditures are predicted to increase by 4.9%.

Decline in Industrial Production Expected

A continuation of the decline in industrial production is anticipated. A yearly decline of 8.8% is projected for durable industrial production, while a 5.3% decrease is expected for non-durable industrial production. The production index in the manufacturing industry is also expected to decrease by 4.5%.

Weak Trends in Foreign Trade

Foreign trade data also shows a weak outlook. Exports are forecasted to decline by 6.5% compared to the same period last year, while imports are expected to increase by 7.4% compared to the previous quarter, after adjusting for seasonal and calendar effects. A 1.4 percentage point decrease in the capacity utilization rate is expected compared to the same period last year.

Sektoral data indicates that despite the contraction in the industrial sector, demand in the service sector is expected to rise by 3.1% annually. However, declines in the housing and automotive sectors are notable; a 11.6% decrease is expected in housing loans, while imports of private vehicles are projected to drop by 22.1%.